G.R. No.

L-8169

January 29, 1957

THE SHELL COMPANY OF THE PHILIPPINES, LTD., vs. FIREMEN'S INSURANCE COMPANY OF NEWARK, NEW JERSEY COMMERCIAL CASUALTY INSURANCE CO., SALVADOR SISON, PORFIRIO DE LA FUENTE and THE COURT OF APPEALS (First Division)

FACTS:

This case is about an action for recovery of sum of money, based on the alleged negligence of the defendants.

A car was brought to a Shell gasoline station owned by Dela Fuente for washing and greasing. The car was placed on a hydraulic lifter for greasing. As some parts of the car couldnt be reached by the greaseman, the lifter was lowered. Unfortunately, for unknown reasons (probably due to mechanical failure or human error), while the lifter was being lowered, the car swung and fell from the platform. Said car was insured against loss or damage by Firemen's Insurance Company of Newark, New Jersey, and Commercial Casualty Insurance Company jointly for the sum of P10,000. The insurance companies after paying the sum of P1,651.38 for the damage and charging the balance of P100.00 to Salvador Sison, in accordance with the terms of the insurance contract, filed this action together with said Salvador Sison for the recovery of the total amount of the damage from the defendants on the ground of negligence.

ISSUE:

WON Dela Fuente is merely an agent of Shell Co.

HELD:

Yes. De la Fuente was the operator of the station "by grace" of the Defendant Company which could and did remove him as it pleased; that all the equipments needed to operate the station

was owned by the Defendant Company which took charge of their proper care and maintenance, despite the fact that they were loaned to him; that the Defendant company did not leave the fixing of price for gasoline to De la Fuente; That the service station belonged to the company and bore its trade name and the operator sold only the products of the company; that the equipment used by the operator belonged to the company and were just loaned to the operator and the company took charge of their repair and maintenance.

As the act of the agent or his employees acting within the scope of his authority is the act of the principal, the breach of the undertaking by the agent is one for which the principal is answerable. The latter was negligent and the company must answer for the negligent act of its mechanic which was the cause of the fall of the car from the hydraulic lifter.